Some sound real estate investment trusts proposals from SebiA recent consultation paper put out by the Securities and Exchange Board of India (Sebi) seeks, rightly, to amend and make up to date the norms and regulations pertaining to real estate investment trusts (REITs).The investment vehicles offer steady attractive returns and we do need to coagulate funding for much-needed investment in townships and built spaces.The Sebi paper seeks to broaden the definition of ‘real estate’ or ‘property’ to include hotels, hospitals, convention centres and other such rent-generating assets, notified as infrastructure by the finance ministry, which is unexceptionable.The proposal is also to prudentially and transparently liberalise REIT holdings in special purpose vehicles (SPVs). Real estate assets are usually held through multiple layers of investments as each project may come with its own set of investors, landowners, development partners, etc.Such multilevel holding structures are required for ease of unbundling and scalability.Sebi paper seeks to broaden the definition of ‘real estate’ or ‘property’Sebi paper seeks to broaden the definition of ‘real estate’ or ‘property’The current REIT regulations define an SPV as a company or firm that holds not less than 80% of its assets directly in properties and does not invest in other SPVs. The regulator’s move is to limit REIT controlling interest to not less than 50 per cent in an SPV, so as to provide greater operational flexibility.Besides, the Companies Act 2013 does allow a company to invest through two layers of investment companies.The paper also seeks to tweak other rules: increase the number of sponsor groups in REITs from three to five, realign guidelines for ‘associates’ and related parties as per the Companies Act, and provide some flexibility on minimum shareholding and 20 per cent investment in under-construction properties.In parallel, we need to operationalise the Real Estate Act, 2016, and purposefully revamp regulatory oversight.